21 Must-Have Pastor's Tools: Financial Planning

When undertaking financial planning, here are some suggestions to consider.
When undertaking financial planning, here are some suggestions to consider. (Flickr )

Editor's Note: This is one of a continuing series of stories on pastor's tools from Ministry Today magazine's special May/June issue, MinistryToday 21.

What does it take to run a church today? The pastor just starting out in ministry may be surprised by the answer. While it's important to keep kingdom purposes at the forefront, experienced church leaders have found that a pastor's toolkit consists of many instruments that are helpful in doing the work of the ministry today.

We have pooled some of our own talent to answer that question and have asked a number of businesses to give their take on what 21 tools the pastor needs to kow are available for meeting today's congregational needs.

Financial Planning

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Churches that are financially stable are better equipped to accomplish their God-given callings. Here are a few things you can do to build a strong financial foundation for ministry success:

Good financial practices are core to ministry sustainability. Get started with the following:

  1. Establish a well-planned budget. When making budget projections, rather than taking the previous year's amounts and modifying them, start at zero. Evaluate each expense line item independently based on need and the overall vision for your church. In addition, project income conservatively to reduce the likelihood of a cash shortfall and coordinate larger purchases with higher giving months.
  2. Obtain regular financial statements. Ideally, have these prepared by a certified public accountant (CPA). Financial statements provide pertinent information for making accurate budget projections. They are key in helping you maintain accountability by demonstrating how and when funds were used, and they play an essential role in qualifying for a church loan.

Another important factor in building a strong church is risk management. If a fire destroys your building or a child is hurt by a volunteer, the financial outcomes can be crippling. But more than just helping you avoid an expensive lawsuit, risk management is about anticipating the unexpected so your ministry can continue to impact the people of your community. You can identify possible risks by conducting facility inspections and reviewing current policies and procedures quarterly, looking for ways to improve. Some of the most crucial areas every church should address are:

1) Abuse prevention for minors
2) Emergency response
3) Facilities use
4) Vehicle safety
5) Cell phone use while driving
6) Social media use

The two factors above provide the stable footing you need to be able to grow and widen your impact. At a certain growth point, many churches will need to consider expanding their facilities or building new ones, which may require obtaining financing. It's crucial to know how much you can safely borrow and have a plan for paying it off quickly. One simple way to estimate the maximum amount your church should borrow is to multiply your total annual undesignated income by three. Then partner with a trusted lender early in the planning process to avoid over-borrowing and/or ending up with an incomplete project. Planning strategically for growth now will help you be financially ready for new phases as they arrive.

These three steps and other church finance topics are explored in detail in the Interactive Guide to Church Finance, a free resource provided by AG Financial Solutions. You can download it today at agfinancial.org/freeguide. It also features a variety of tools, templates and videos designed to help you establish a strong financial plan for your church.     


AG Financial Solutions (agfinancial.org) provides churches, ministers and individuals with industry-leading investments, retirement planning and ministry financing that builds financial health.

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